![Show Menu](styles/mobile-menu.png)
![Page Background](./../common/page-substrates/page0196.png)
194
Rothschild & Co | Annual Report 2017
Statutory auditors’ report on the financial statements for the
nine-month period ended 31 December 2017
This is a translation into English of the statutory auditors’ report on the financial statements of the Company issued in French and it is provided solely
for the convenience of English speaking users.
This statutory auditors’ report includes information required by European regulation and French law, such as information about the appointment of the
statutory auditors or verification of the management report and other documents provided to shareholders.
This report should be read in conjunction with, and construed in accordance with, French law and professional auditing standards applicable in France.
Opinion
In compliance with the engagement entrusted to us by your General
Meeting, we have audited the accompanying financial statements of
Rothschild & Co for the nine-month period ended 31 December 2017.
In our opinion, the financial statements give a true and fair view of the
assets and liabilities and of the financial position of the Company as at
31 December 2017 and of the results of its operations for the nine-month
period then ended in accordance with French accounting principles.
The audit opinion expressed above is consistent with our report to the
Audit Committee.
Basis for Opinion
Audit framework
We conducted our audit in accordance with professional standards
applicable in France. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
Our responsibilities under those standards are further described in the
Statutory Auditors’ Responsibilities for the Audit of the Financial Statements
section of our report.
Independence
We conducted our audit engagement in compliance with independence
rules applicable to us, for the period from 1 April 2017 to the date of our
report and specifically we did not provide any prohibited non-audit services
referred to in Article 5(1) of Regulation (EU) No 537/2014 or in the French
Code of ethics (code de déontologie) for statutory auditors.
Justification of Assessments –
Key Audit Matters
In accordance with the requirements of Articles L.823-9 and R.823-7 of the
French Commercial Code (
Code de commerce
) relating to the justification
of our assessments, we inform you of the key audit matters relating to risks
of material misstatement that, in our professional judgement, were of most
significance in our audit of the financial statements of the current period,
as well as how we addressed those risks.
These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on specific items of the financial statements.
Impairment of investments in Group, other
companies and portfolio holdings
Key audit matter
As at 31 December 31 2017, the company holds 1,701 million euros
through investments in Group, other companies and portfolio holdings,
which represent 88% of the total amount of assets.
The net asset value of these investments in Group, other companies
and portfolio holdings is determined by Management, depending on the
availability of the data and by using quotation prices, net or revalued share
in equity or references to recent transactions.
When the inventory value thus determined is lower than the acquisition cost
of these investments, an impairment is recognised.
The methodology and assumptions used to determine the inventory value
of investments in Group, other companies and portfolio holdings requiring
the exercise of judgement, and considering the relative importance of the
amount of these financial assets in the balance sheet of the Company, we
considered that the determination of impairment of investments in Group,
other companies and portfolio holdings is a key audit matter for the annual
accounts of the Company.
Paragraph III “Accounting principles, rules and methods” of the appendix
sets out the methods for recording an impairment to cover the risk of a
decline in the value of investments in Group, other companies and portfolio
holdings.
Our response
Our procedures consisted of:
• understanding the internal control and governance put in place by
Management to measure the inventory value of investments in Group,
other companies and portfolio holdings;
• considering the validity of the methodologies applied and the relevance
of the parameters and assumptions used by the Company to determine
the inventory values of these financial assets; and
• testing, on a sample basis, the inventory values used by the Company
for these financial assets and the correct application of the methods.
Lastly, we made sure that the information presented in the financial
statements is appropriate.